I finished that article on regime change for a trade magazine, and it has been approved. It should be published some time in the next few weeks (I’m guessing). There was one part of it that I thought was particularly interesting that I wanted to highlight because it seemed very relevant to the current market. The market positioning has been “overly bearish” for some time, and partly as a result, the markets have not been able to sell off for most of this year. EDZ0 is UP 2bps on the year, despite much-better data and a hawkish FOMC. That’s got to be a head-scratcher for bears, but I think misinterpreting historicals are one of the causes.
The jist of my article was that algos are *overly* dependent on historicals, and are less likely to factor in the drivers that may have changed in the current environment, as compared to the historicals. But I suppose most human traders (including myself) can also be overly dependent on the historicals. The article highlights a number of major and minor regime changes one should factor in when looking at historicals to look at the present.
The two factors I wanted to highlight today are: CLICK TO READ THE REST OF THIS ARTICLE FROM THE CA WEB SITE
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